If we could describe the 2024 mortgage market in just three words? Challenging but adaptable.
Inventory remained low, prices kept climbing higher, and hopeful buyers learned to accept slightly elevated interest rates.
But, hey, it wasn’t all gloom and doom. There were definitely some bright spots! Home sales remained solid, and refinances were on the rise from the year prior. Not to mention, all the new and exciting tech on the scene.
So, while a new year and a new real estate market are already officially here, it’s important to remember that recapping and reflecting on the past can drive growth and improve decision-making for the future.
That’s why, in this year-in-review, we’ll break down some of the biggest mortgage trends of 2024. This includes rates, refinances, home sales, and the tech innovations that shaped the industry.
Let’s take a closer look at each key insight:
It’s no secret that the past few years have been characterized by fluctuating affordability, as mortgage rates plunged to an all-time low (sub 3%) in 2020, then careened back up to a high not seen since 2002 in 2022 (7.08%, at the top). This past year saw some similar, albeit much less intense, seesawing.
In 2024, rates remained relatively high with the average hovering around 6.7%. But we did see some softening in the fall, as they dipped below 6%. Then, in November, they crept right back up again.
So, if you finished out the year with a bit of whiplash, you’re not alone!
But there is some potentially good news on the horizon. While the Fed’s rate cuts in September, November, and December didn’t have much of an immediate effect, they might inspire some optimism for 2025. Stay tuned!
2023 saw a 64% reduction in refinances year-over-year. So, it’s not exactly surprising that 2024 seems to have fared a bit better.
The third quarter, in particular, was a standout, with volume up 57% year-over-year. Remember: That’s when mortgage rates ticked down. Understandably, homeowners were eager to lock in these relatively lower rates, cutting down their monthly payments, potentially building equity even faster, or ensuring more cash on hand.
As the 2025 landscape takes shape, mortgage rates will again come into focus here. That’s because lower rates could activate more than just new buyers — they could drive refinance volume, as well.
Between slightly higher mortgage rates and persistently high prices, the 2024 real estate market proved a bit challenging. But, despite this, home sales actually ticked up last year.
Sales were up a sizable 23% year-over-year in June and a less-impressive but still notable 6.1% in November.
The belief is that a more stable economy, growing job market, and increasing housing inventory encouraged a number of buyers to take the leap. Some borrowers probably also came to the conclusion that interest rates below 3% are simply a thing of the past and chose to act.
No doubt about it, mortgage rates will again be a factor when it comes to home sales this year. That’s especially true as prices continue to trend upward.
Of course, everyone was talking about tech all throughout 2024, and the mortgage industry was no exception.
AI was a hot topic, with many mortgage pros exploring the world of artificial intelligence. In many cases, what they found is that the opportunities are virtually endless.
A few of our top use cases for business owners specifically last year included:
Essentially, whether you’ve fully embraced ChatGPT or are cautiously observing from the sidelines, no doubt these conversations will continue in this new year.
So, was 2024 a year to remember in your business? Or are you all too happy to have seen the dawn of a new one?
Either way, recapping and reflecting on previous seasons can help mortgage professionals just like you learn, grow, and better prepare. That way, you and your mortgage business can take this new year by storm.
And then, who knows? By this time next year, you could be reflecting on all your success.
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